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Siddharth Parwatay

Smart SoHo


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Open source has come to be synonymous with the word free. Yet there are several businesses that are adopting the open source model as a strategy to stay afloat in today’s times. If open source is free, then where is the money, especially if you decide to release your software into the open source world? The first thing we need to understand is that free relates to the word freedom. The famous quote goes, “To understand the concept, you should think of free as in free speech, not as in free beer”. Therefore, thinking of open source as free and hence “no revenue” is a misnomer. If you are an independent developer, or are considering some sort of open source strategy or are just curious how an OS strategy might work; these are some of things you should consider.

Open source is all about freedom, so where’s the money? Here’s a look at various strategies for businesses, entrepreneurs and developers in the open source world


greater product development. As Venkatesh Hariharan, Corporate Affairs Director at Red Hat puts it, “In the next few years, we may see the pace of innovation in open source outstrip anything that proprietary vendors and their closed group of paid programmers can produce.” The make-or-break then lies with retaining these developers who contribute to the product and the community at large, ostensibly without any tangible return. Developers will not contribute if they don’t remain interested. So a lot of what you do as a company to support these developers will determine if they take an active interest or not. Treating developers and the community fairly to a great extent is also a function of what kind of licences you release your product under.

Licencing for the open business
Licencing is perhaps the most important component of the open source model. There are several licences plus their variants in this domain, but all of them share some common principles, such as free distribution (no royalty), scope for derived works (modification), etc. The complete list of principles is available at www.opensource. org. In effect, licences go beyond just access to the code. Here are some of the main licences that are applicable.

Why open source?
It is important to understand that open source is not a supernatural cure-all and neither should it be shunned from the point of view of business and revenue. The basic premise we will go from is that a company or developer engaged in the software business is in it to provide value to the customer or end user. In such a case, open source will help a product maker potentially to provide better value to customers, by leveraging the ability for your customers or third parties to improve the product through bug fixes and product enhancements. The key is also to provide better value to customers than competitors, and then ultimately turn that value into a revenue stream. Fortunately or unfortunately – which ever way you look at it – open source ensures the survival of the fittest. The open source model differs from the traditional model in the sense that you as a software developer, will most likely provide only part of the support to end users. The large base of your support will be provided by a community of developers engaged in furthering your product. These developers are attracted to your product as opposed to your competitors’. In such a way your resources are greatly augmented. What motivates these independent developers? That is a huge subject altogether, but some of the motives are - the satisfaction of working on a product that addresses a critical functional area in their lives or other people’s lives; the fact that developers look forward to the possibility of providing allied services and creating related products, thereby gaining a revenue stream; they might also view working on your product as a learning opportunity; and finally there is the ego kick of building a reputation amongst peers. All this free resource augmentation brings down your cost of operation. It also facilitates in
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No licence (Public Domain)
In open source software, the originator of the code, although while not charging anything for distribution, still has the copyright to the original code. In this type of licence, the copyright is waived. This is a no-holds-barred form of usage; users are free to do whatever they want with software that is released in this manner. This includes using it as a base for proprietary software.

BSD Style licence
BSD stands for Berkeley Software Distribution, and this type of licence is most famously used for the operating system Open BSD, and the Apache web server. This licence was originally designed to release software which resulted as a by product of academic research. It gives importance to attribution and proper mentioning of credit. Commercial proprietary products are possible under this licence.

This licence was created by the legendary Richard Stallman, father of the Free Software Foundation. So naturally, it lies on the complete opposite side of BSD style licences, that leave scope for commercial exploitation of code. Thus the General Public licence and its variants deter developers from modifying code and not redistributing it back into the community.

The venture used open Alternatively. So. and engagement with brought down. getting your product is believed that the open source version at the point of value. Support sellers business is at an all time low. which is practically system developed totally in-house.thinkdigit. it on OpenSolaris. then you to extensive peer review and can use technologies like Java start making money. With the Some of the most notable examples are it allows for deep market penetration.2 of this be distinctly separate from the original month’s Fast Track to Those who take the entrepreneurial route MPL code. At that In many different ways people. such students business turns profitable or invest a lot of their own developers’ time. Facebook. If you are that follows this model. open source OpenSolaris platform. this means selling associated “When you’ve worked in open source for a purposes as the provisions allow for paraphernalia to generate revenue. such as operating systems. The to open source projects. but this also includes code need not be made publicly products like T-shirts. and so anyone with a product idea point where they saw value in it.when you testing. One is an covered under MPL must be made publicly open source products to suit the needs of large open source licence and the other is available. A student’s of cost. developers in the country to work on the year with a technical degree In conclusion. It is multitude of communication and distribution of Firefox. Eventually you gain a contributor code and then releasing a larger work that can specifically compatible hardware are the more status in the community and people be commercially licenced. IDE’s and point Facebook had a lot of users and angel students and entrepreneurs. open source communities would prove to be a a developer who handles the maintenance. enterprises. which is a instance many software related enterprises run their contribution is free platform” says Abhishek. both by developer EE. This in effect involvement in open source and the learning can use open source to develop it without is a business model. the process of open commercial product. Facebook started with MySQL as product is good. “This is what can be handled. open source technologies. This way the entry conversation on open barrier for anyone who wants to break into the source.” says grow. What you did in your Read available. free funding. “The logic is . This is perhaps source development. and user communities. and contributions to open creates an ecosystem for Business models for open source are many. It’s a testimony to their technical In this scenario.NET framework Stop piracy Rampant piracy is the biggest hurdle to widespread adoption of open source software Smart SoHo Mozilla Public licence Accessorising a developer. For so for a student contributor. base subscription. they are in a position to hire the most common type of business model. If Companies strive to make their installation great advantage for developers and bring both he/she finds a problem he/she emails the PHP process simpler by giving customer friendly direct and indirect revenues to both small as or MySQL community and gets the application media. and Netbeans to empower customers to be able to make money. such as providing professional services In this type of model software for operating licences APIs. where they need to invest up with their own business model or make Abhishek. If you have a good product released under the open source Business models understanding of how communities work. so they excellence. Red Hat is one of the companies well as large entrepreneurs. are offered as add-ons. Contributions you start a business creating they become part of your business logic. training manuals and to yourself. And this holds Consider this scenario – say a life sciences In this type of model the company backing good for everyone who uses technology in business is running a sales force automation the product distributes the software for any form in their business. Once you start developing with open source can harness the power of community. specifically programming languages. exclusively free but makes money off things like media everyone in today’s world. when the critical part of their business process.” Chapter 1. as attract higher compensation demands increase beyond well as money into the Mozilla Foundation. can take even source code management systems.” in the industry. Associated certain amount of time you have a brand value augmenting the original code with proprietary products like books. your customers will find a Developments of the open source version it did not have investment to buy a paid data point at which they find value in your product. so Facebook paid for the service at a advantage of open source. Thus. The security bug fixes became unmanageable. MySQL. (SunSolaris only at the point where they hybrid combinations as follows. databases. A famous example is of out in the market becomes simpler. It must interact with the can monetise their contribution in multiple open source software Dual Licencing original code through predefined ways. As a result of costs being and even customisation. MySQL and OpenOffice. you when they start making money. While at the same time all on open source products and solutions and vendors offer the same product modifications to the original code charge for customising and extending current under different licences. coffee mugs and understand that value. This licence is quite suited to commercial Simply put. running again with their 109 . Digit | August 2009 | www. employability. then such companies going the open source way will be looking for you. source projects can be a businesses and entrepreneurs to In fact open source businesses are free to come big differentiator. It generally believed that customers start paying channels available today. harnessing on PHP and MySQL. Such proprietary substantial options. entrepreneurs can make source tools such as MySQL to give motion a very viable business only by investing to an idea but when patching servers and The return on investment their idea and time with open source. etc. development tools. The open source developer community is open source world offers almost all the Facebook bought a MySQL subscription comprised of a large number of students. “For instance if applications you allow people to use them. and develop a product and deploy you start a revenue stream for yourself. If your serves to popularise the commercial one. The proprietary code must action figures with product branding. support and training. branding. to open source are subjected and managing websites. All this involves working with a proprietary licence which the vendor open source communities and contributing usually offers to enterprise clients.Microsoft gives in? The software giant allows open source developers to use the . whom Digit Abhishek Kumar. you licence is free to distribute or modify. there is said Abhishek Kumar who is an open particularly relevant in our always the option of going to source evangelist and works for with Solaris country where thousands professional support for each of Outbound Product Marketing to promote of students graduate every the concerned technologies. free time actually gives you a day job. derived in the process enhances his or her making any significant capital When you develop open source resume and improves investments. Firefox across many of their terminals. as opposed to a distribution. and paid them to solve the problems. spoke to in a freewheeling Outbound Product Marketing) see value.